USD/ZAR Forecast Today 18/04: Testing Key Support (Chart)

(MENAFN- Daily Forex)

• The US dollar initially tried to rally on Thursday against the South African Rand but has given back the initial gains.
• That being said, this is a market that I think will continue to be very noisy, especially as there are a lot of questions to be asked about risk appetite, and the global rate situation of course will be on the forefront of thinking.

That being said, this is probably more about the US dollar than anything else. After all, the South African Rand is an emerging market currency, and at this point in time the only reason that it is starting to strengthen against the US dollar is that the US dollar itself is weak. Traders are trying to repatriate money, and therefore the US dollar has struggled against multiple currencies, but given enough time, one would have to assume that this trend will end. In that environment, we could see the South African Rand struggle a bit. After all, in the present environment in South Africa, there seems to be a lot of concerns about government overreach and lack of safety with certain assets.

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The technical analysis in this USD/ZAR pair is bullish despite the fact that we had gotten crushed just during the past 2 weeks alone, as we are well above the 50 Day EMA. The 50 Day EMA currently resides right around the 18.63 level and is rising. It is possible that perhaps we need to continue to drop from here in order to test that 50 Day EMA, but I also recognize that we live in a time right now that the latest announcement could send this market flying in either direction.

EURUSD Chart by TradingView

If we were to break above the 19 ZAR level, that could open up fresh buying, just as a breakdown below the 18.60 ZAR level could open up fresh selling. I think we are at an inflection point right now, but you can say that in several pairs involving the US dollar, as it has gotten so one-sided.

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